Definition of Share Market Value
By definition the term share market value designates the worth of stocks that are being sold in a particular share market. There are a lot of ways that can be used to find out the share market value. However there are two principles, which are the most fundamental in this regard.
Book Value is one of the two fundamental principles used to calculate the worth of any stock. The term book value is used mostly in the United Kingdom as a substitute for net asset value. The book value of a stock is calculated from the balance sheet of a company which is an accurate reflection of the total worth of that company.
Investopedia says that the book value of any investment in the domain of personal finance is the price that needs to be paid for a security or a debt investment. The ultimate selling price of the same subtracted from the book value determines the loss or profit of the particular investor.
The investor’s expectation with regard to any security that is being traded in the stock market has a great importance for ascertaining the market value of the same. It is primarily employed in industries other than the stock market in order to gauge the long term potential worth of any specific commodity.
The intrinsic value is the other most important device or means to measure the share market value of any stock. This is basically an all inclusive form of analysis, which takes into account the business performance of a company. Both the physical as well as non physical properties of the company are considered while making any analysis of the intrinsic value of shares.
The intrinsic value is the best way to judge the value of share or any commodity as it gives more appropriate measurement of the physical assets as well as the non physical assets than that offered by the book value and the market value respectively.
Last Updated on : 26th June 2013